Free Credit Reports – Are you entitled?

Your credit report is necessary for obtaining a loan, auto insurance or for procuring a credit card. A clear credit report is instrumental for obtaining all these services at reasonable rates. According to FACT Act (The Fair and Accurate Credit Transactions Act), you are eligible for one free credit report per year from all the union credit reporting agencies namely, Equifax, Experian, and Trans Union. For obtaining your free credit report, you can either call the official toll-free number (877-322-8228) or log on to the website, www.annualcreditreport.com.

Characteristically, a free credit report is a comprehensive compilation of your credit record. It includes various details such as outstanding payments and history of credit card bill payments. Free credit reports display your overall credit score, which is based on FICO method developed by Fair, Isaac & Co. All the union credit reporting agencies follow the same method, but scores may vary because union credit reporting agencies collect financial data from varied sources and do not share information between each other. The credit score of an American citizen is usually between 300 and 850. There are certain benchmarks in place based on which the rank of a score is determined. If your credit score is below 600, it will be ranked as a bad score whereas if you have a score above 720, it will be rated as a good score.

You can order the free copy of your credit report anytime you want from any of the union credit reporting agencies. In case, you are applying for a loan or credit card, you can order your free reports from all the credit report agencies at the same time. This way you can check what union credit reporting agencies are reporting and how the given information will affect your chances of obtaining a loan at low interest rates. Even if you are not applying for any loans, you still need to check information given on a credit report on an ongoing basis. You can do this by ordering the free copy of your credit report every four months.

Although the ‘one free credit report per year’ rule is applicable on every consumer who has credit accounts in his name, it does not apply in certain situations. You can get the free copy of your credit report if you have been denied credit, if you are unemployed and intend to apply for employment, and if you are on public welfare assistance. Further, credit report laws in seven states allow you to obtain free copies of your credit report, over and above the one free credit report per year available nationwide. The states where this rule is applicable include Georgia, Massachusetts, Maine, Vermont, Colorado, Maryland, and New Jersey.